The euro edged lower and is on track for a sixth straight day of losses, gradually approaching—but not yet decisively testing—the 50-day moving average near 1.1770. ECB President Lagarde struck a constructive tone, suggesting US trade tensions could accelerate European reforms, while the ECB’s plan to extend repo lines to foreign central banks from Q3 2026 reinforces efforts to boost euro liquidity and strengthen its global standing. Today’s German final January CPI and February ZEW expectations survey could provide additional near-term direction.

The pair is tracking lower today, giving back part of Monday’s roughly 0.5% rebound that snapped a five-day losing streak, and remains close to last week’s two-week low of 152.24. The yen has steadied amid renewed attention on domestic fiscal policy coordination and comments from former BOJ board member Saiji Adachi pointing to a possible April rate hike. Although Governor Ueda said no explicit rate request was made in talks with PM Takaichi, markets remain sensitive to gradual signals of policy normalization.

The Australian dollar slipped after the RBA minutes reinforced a data-dependent stance, stressing that the February rate hike to 3.85% was needed due to persistent inflation and a tight labor market, while offering little clarity on the near-term policy path. Although the lack of new hawkish signals limited immediate upside, the RBA’s firm tone and resilient domestic data should continue to support the AUD. Markets assign low odds of a March hike but expect a strong chance of further tightening later this year, with upcoming employment data—forecast to show solid job gains and a slight rise in unemployment—likely to shape expectations.